Each of the military services was forced to scale back training and maintenance activities in fiscal 2013 because of the onset of sequestration. But Defense Secretary Chuck Hagel said if the budget cuts are here to stay, the military may have to get used to a future of decreased military readiness over the longer term.

Military leaders have said consistently and repeatedly that sequestration has already damaged readiness within its first year. For example, the Army stopped troop rotations through its combat training centers, the Air Force grounded a third of its combat forces, and the Navy held back the deployment of an entire carrier strike group so that it could hold trained forces in reserve.

But Hagel said even though DoD desperately wants sequestration to be lifted, the military services need to start thinking about how to do the best they can with the limited training and maintenance funds they’ll have available under the budget caps.

“The Strategic Choices and Management Review showed that the persistence of sequester-lever cuts could lead to a readiness crisis. And unless something changes, we have to think urgently and creatively about how to avoid that outcome, because we are consuming our future readiness now,” he said. “We may have to accept the reality that not every unit will be at maximum readiness, and some kind of a tiered readiness system is perhaps inevitable. This carries the risk that the president of the United States would have fewer options to fulfill our national security objectives.”

Hagel, who spoke at the annual global security forum at the Center for Strategic and International Studies, outlined six priorities for matching DoD’s missions with a constrained budget. Preparing for a “prolonged military readiness challenge” was among them.

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Each service feeling the effects

Until recently, military leaders have winced at the term “tiered readiness,” but many say it’s now becoming a reality. For instance, in the Army, out of 45 brigades, only two of the ones that are not deployed to Afghanistan are fully trained and ready to respond to a major contingency. So between now and next June, the Army is planning to funnel virtually all of its training funds into just seven brigades.

“If we’re able to do that, we’ll get them trained and ready, because my biggest fear is that we’ll be asked to send our people somewhere around the world and they’re not prepared,” Gen. Ray Odierno, the Army Chief of Staff said in a late October interview with Federal News Radio. “But what that means is that the rest of the force is going to be trained at very, very low levels. That’s a problem for us, but we have to do that, because we don’t know when we might be asked to use the Army because of the uncertainty in the world today.”

The Air Force is going down a similar path, according to Gen. Mike Hostage, the commander of Air Combat Command. Some units will be fully trained, but many won’t. The Air Force and combatant commanders, he said, will have to accept that some units won’t be available to deploy to a contingency until they’ve had time to train.

“To send them forward anything less than fully combat-ready would be morally corrupt,” he said at an Air Force Association conference in September. “To deal with sequester, our training focus will be placed on those airmen who are next on deck to fulfill our most critical missions, regrettably, leaving many others only partially prepared.”

Apart from managing through an inability to keep forces trained, Hagel said there are five other broad categories where DoD needs to do more to stretch its dollars further in a prolonged sequestration scenario.

Administrative reductions coming

Atop his list: shaking up the bureaucracy of the Pentagon itself.

“Coming out of more than a decade of war and budget growth, there is a clear opportunity and need to reform and reshape our entire defense enterprise, including paring back the world’s largest back office,” Hagel said Tuesday. “A first step we took this summer was to announce a 20 percent reduction in headquarters budgets across the department, beginning with the Office of Secretary of Defense. Our goal is not only to direct more of our resources to real military capabilities and readiness, but to make organizations flatter and more responsive to the needs of our men and women in uniform.”

Some DoD organizations are trying to beat the 20 percent reduction Hagel ordered. Army Secretary John McHugh has told all of that service’s headquarters elements to shrink themselves by 25 percent. The Army also has expanded the definition of what constitutes a “headquarters.” It started with only major commands headed by a four-star general, but the instructions now apply to everything down to two-star commands.

“If we can save, let’s say, 4,500 spaces in those commands, that’s one brigade combat team or an aviation brigade,” Odierno said. “I think we’re going to get some good savings from this.”

Among Hagel’s other priority focus areas during sequestration: A hard look at the military’s assumptions about the forces it will need to conduct missions in the future. Also, the Pentagon has to find ways to make sure that investments in science and technology programs for the future aren’t raided to pay for current operations.

And as the military draws down, he said, the cutbacks need to be carefully balanced across the broad categories where DoD spends its money.

“Across the services, we will need to carefully reconsider the mix between capacity and capability, between active and reserve forces, between forward- stationed and home-based forces, and between conventional and unconventional warfighting capabilities,” he said. “In some cases, we will make a shift, for example, by prioritizing a smaller, modern and capable military over a larger force with older equipment. We will also favor a globally active and engaged force over a garrison force. We will look to better leverage the reserve component, tempered by the knowledge and experience that part-time units in ground forces especially cannot expect to perform at the same levels as full-time units, at least in a conflict’s early stages.”

Compensation debate continues

Finally, Hagel said, DoD needs to find some way to chip away at cost growth in the area where the department spends about half its money — personnel. If it doesn’t, he said, the inevitable outcome is that the U.S. military will be paid pretty well, but poorly trained and poorly equipped.

“Going forward, we will have to make hard choices in this area in order to ensure that our defense enterprise is sustainable for the 21st century,” he said. “Congress must permit meaningful reforms as they slash the overall budget. We will need Congress as a willing partner in making tough choices to bend the cost curve on personnel, while meeting all of our responsibilities to all of our people.”

So far, Congress has rejected almost all of DoD’s recent proposals to reduce personnel spending. It did agree last year to appoint a commission to study the issue of compensation and retirement reform for the uniformed services, and that panel was holding one of its first meetings across the Potomac River in Arlington, Va., just as Hagel was speaking.

But there’s no guarantee at all that Capitol Hill will pay any attention to whatever proposals the nascent Military Compensation and Retirement Modernization Commission eventually decides upon. Before punting the issue to the new advisory panel, lawmakers ditched language that would have required Congress to at least take a vote on its final recommendations.